What is the difference between an agent and a broker?

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The difference between an agent and a broker is that agents typically represent single firms while brokers typically represent many different firms. An agent places securities transactions for or sells insurance to consumers. A broker charges fees or commission in exchange for helping her clients buy or sell something.

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The insurance industry has both agents and brokers. Most agents are employed by and represent a single company. Called captive agents, their role is to explain insurance products to their clients. There are also independent agents who sell insurance from a range of companies. Neither of these professionals is responsible for the financial success of their clients.

Insurance brokers, in contrast, must be licensed, and they have an obligation to analyze a company's or individual's financial state to ensure they are buying the right type of insurance.

Agents usually work as an intermediary between a company and a consumer. They may also represent brokers or dealers, and they may try to sell securities to the public on behalf of these entities.

Brokers can also be licensed real estate professionals. They represent sellers, and their role is to help sellers determine the market value of their homes, advertise their homes and show their homes to prospective buyers.